By David Ball | May 14, 2020
It may take Covid-19 – the worst pandemic in over a century and one that has been likened to a killing machine and a nuclear catastrophe – to finally force U.S. businesses to take crisis planning seriously.
Until now, crisis planning generally has taken a back seat to day-to-day operations, as most CEOs preferred to contemplate the here and now rather than a hypothetical event that could damage their reputations or maybe even put them out of business, if not handled correctly. Too often, leaders of companies think quarter by quarter instead of taking a long-term view of ensuring the stability and integrity of a business.
I know, because in the two-plus decades I have managed crises for a living, most of the calls I have received have been immediately before a negative situation comes to light, or sometimes right after it goes public. The reality is that crises can be better managed when they are considered long before they ever surface, as part of a planning process.
The PR impact of Covid-19 on many organizations has been as severe as it has been swift. The cruise ship industry, for example, will need a major image rehabilitation after several ships became hotspots for the disease and were forced under quarantine, at times left wandering the seas in search of a friendly port. Many passengers spoke highly of how well they were looked after by the staff, and that helps, but the industry will be beleaguered by skittish would-be travelers as a result. Other companies will suffer for not taking quick enough action, such as for not making clear to workers that they will be compensated for sick time during the crisis.
A crisis planning process brings a company’s executive team and line managers together to identify areas that could potentially become crises. A group session enables the team to openly discuss challenging situations, who owns them, and how they can be resolved. One-on-ones allow the person developing the plan to probe more deeply and inventory potential issues with team members.
Hard questions get asked, such as, “Is the company’s insurance protection strong enough to rebuild after a crisis, such as the loss of months’ worth of sales?” “Does coverage include a natural disaster, such as a pandemic?” Or, “Is there true IT redundancy so that if all automated processes were corrupted today, we could be up and running with full data integrity tomorrow?” Sometimes these hard questions cannot be answered satisfactorily, and the plan will flag those and recommend that management bring in the appropriate consultants and experts to resolve them.
People often ask me what goes into a crisis plan. Here are four key areas to cover:
Define what a crisis is (and isn’t) and how it gets reported up the chain.
CEOs often lament that they did not know about a situation sooner. That is because someone between frontline staff and the top determined it did not need to go up the chain. A good crisis plan defines what a potential crisis is and guides the user in making the determination. More than that, it establishes the sequence for escalating a problematic issue up the chain of command. A junior staffer wants to own a crisis no more than a chief executive wants to be surprised.
Inventory trouble spots.
Done right, the extensive investigatory process as the plan is being developed enables the author(s) to see where the gaps and liabilities exist in the organization and how it should fix them. If several managers point to a trouble spot, such as a policy that needs to be revised to prevent a crisis or tragedy, the plan should include a recommendation that the leadership promptly remediate in a particular area. Once documented in a plan; it is likely to get done.
Determine who is on the crisis team and what their roles are.
The crisis plan should identify every individual on the crisis team and clearly establish their responsibilities. If there is a local issue, who is responsible for coordinating with city or town officials? If an alternate site needs to be secured after a fire or flood, who has authority to sign the lease and cut the check? The plan should make clear who is doing what and, in drills that take place to practice the plan, those roles should be put to the test.
Be ready for media.
Media interest and news coverage are often the hallmark of a crisis. In most cases, in the first 24 hours the company will put out a holding statement. Don’t wait for the news trucks to show up in the parking lot to determine what you are going to say. The plan should contain templates of eight or 10 crisis scenarios and what the appropriate messaging would be for a statement. When the media comes calling, pull out the template, fill in relevant details, and issue the statement – thus quickly buying some time to deal with the crisis internally.
Better decisions get made when more time is available to consider the options. Without a crisis plan, time ticks away like sand through an hourglass while the company scrambles to respond. Precious time is lost and sometimes the company might forego comment altogether, thereby immediately assuming the posture of a guilty organization as it utters “no comment.”
Companies and their leadership teams will learn many lessons from the coronavirus pandemic. One important takeaway will be the need for comprehensive crisis planning and improved readiness. We may be witnessing the unthinkable now, but businesses will learn how to be better prepared for the next unthinkable thing.